Mary Meeker is a venture capitalist, author and former Wall Street securities analyst. She is a partner at the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, or KPCB.
Meeker focuses on investments in the firm’s digital practice and helps lead KPCB’s Digital Growth Funds, targeting high-growth Internet companies that have achieved rapid adoption and scale. Her annual Internet Trends report is keenly awaited by industry watchers.
Here are some observations.
Disruption
- The speed of technological disruption is accelerating.
- It took about 80 years for Americans to adopt the dishwasher. The consumer internet became commonplace in less than a decade.
- Disruption will also happen in the way we work. Just as Americans moved from agriculture to services in the 1900s, employment types will again be in flux. This time, expect more on-demand and internet-related jobs to predominate.
Artificial Intelligence
- Leaders like Google and Amazon will offer more AI service platforms as it becomes a bigger part of enterprise spending.
E-commerce
- Physical retail sales continue to decline.
- E-commerce sales growth is continuing to accelerate. It grew 16% in the U.S. in 2017, up from 14% in 2016. Amazon is taking a bigger share of those sales at 28% last year.
- Alibaba is leading in the e-commerce ecosystem. If we compare Alibaba and Amazon.com, they have similar focused areas up and down the stack. Alibaba has much higher GMV, customer merchandise volume, and Amazon has much higher revenue.
- China in e-commerce: It has number one in e-commerce sales as a percent of total sales, at 20%, highest in the world and the fastest growing.
Technology Companies
- Tech companies are becoming a larger part of U.S. business. In April, they accounted for 25% of U.S. market capitalization. They are also responsible for a growing share of corporate R&D and capital spending.
- China is catching up as a hub to the world’s biggest internet companies. Currently, China is home to 9 (out of 20) of the world’s biggest internet companies by market cap; while the U.S. has 11. Five years ago, China had 2 and the U.S. had 9.
- Voice-controlled products like Amazon Echo are taking off. The Echo’s installed base in the U.S. grew from 20 million in the third quarter of 2017 to more than 30 million in the fourth quarter.
- Big tech is competing on more fronts. Google is expanding from an ads platform to a commerce platform via Google Home Ordering. Meanwhile, e-commerce giant Amazon is moving into advertising.
- Tech companies are facing a “privacy paradox.” They’re caught between using data to provide better consumer experiences and violating consumer privacy.
Mobiles: Smartphones & Mobile Payments
- 2017 was the first year in which smartphone unit shipments didn’t grow at all. As more of the world become smartphone owners, growth has been harder and harder to come by. The same goes for internet user growth, which rose 7 percent in 2017, down from 12 percent the year before. With more than half the world online, there are fewer people left to connect.
- Despite the high-profile releases of $1,000 iPhones and Samsung Galaxy Notes, the global average selling price of smartphones is continuing to decline. Lower costs help drive smartphone adoption in less-developed markets.
- Mobile payments are becoming easier to complete. China continues to lead the rest of the world in mobile payment adoption, with over 500 million active mobile payment users in 2017.
Internet penetration
Internet penetration has shot up.
Internet users slowing growth of 7% versus 12% growth in the previous year.
Global internet users of 3.6 billion surpassed half the world’s population in 2018. The reality, when you get to 50% penetration, new growth becomes a lot harder to find. That’s where the industry is at a really high level.
That said, internet usage remains pretty solid, up 4% year end year with some U.S. data. It’s not deduped so there’s a lot of multitasking going on. A lot of people ask the question about internet usage, how much is too much? Our view is it depends on how the time is spent. One of the things I feel really strongly about is there’s a lot of innovation and there’s a lot of competition. That’s driving a lot of product improvements, a lot of usefulness and a lot of usage.
Access the entire presentation here: Internet Trends 2018
